Brexit is a factor in Schaeffler’s plan to halve UK workforce

08 November, 2018

Schaeffler has announced plans to shut two of its three UK manufacturing plants: its Barden site in Plymouth, which produces spindle bearings and machine parts for its industrial division, as well as specialised bearings for the aerospace and defence industries; and its Llanelli site, which makes tappets and special-purpose bearings for automotive and industrial users. It also plans to transfer the activities currently undertaken at its logistics centre in Sutton Coldfield to its other UK logistics site in Hereford.

The moves could potentially cut Schaeffler’s 1,000-strong UK workforce by more than half. About 350 could be lost at the Barden plant, and another 220 could go in Llanelli.

One factor in the decision to close the sites is the uncertainty surrounding the UK’s departure from the European Union.

The closure plans are subject to consultation with Schaeffler’s workforce and it is anticipated that they could take up to two years to implement. Following the proposed reorganisation, the company says it will retain a “meaningful” presence in the UK and will continue to operate its largest UK plant, in Sheffield, which assembles clutches for passenger cars and tractors.

The planned UK closures are part of a global initiative in which Schaeffler has been examining the strategic and economic competitiveness and long-term sustainability of all of its sites, which employ more than 92,000 people worldwide. The analysis looked at how best to structure the business in the UK based on various factors, including economic conditions, supply and demand, and the decisions that OEMs are making. It also took into account the fact that only 15% of the goods that Schaeffler makes in the UK stay in the country, with the vast majority being exported to continental Europe. The uncertainty surrounding Brexit was one factor in the analysis.

“A global business needs to regularly review market conditions and strive to optimise its footprint across different regions,” says Schaeffler’s European CEO, Juergen Ziegler. “The proposed measures we have taken for the UK reflect this business reality. However, we remain committed to keeping certain activities in the UK, a country that will continue to be important to us.

“The changes to our UK footprint are designed to make us more efficient by relocating parts of our production closer to where our products are used,” he adds. “Brexit is clearly not the single decisive factor behind our decision-making for the UK market, but the need to plan for various complex scenarios has brought forward the timing.”

Schaeffler is proposing to close the Llanelli and Plymouth sites in the medium term and relocate production to plants outside the UK, in the US, China, South Korea and Germany.

The two logistics centres, in Sutton Coldfield (industrial products) and Hereford (automotive aftermarket), are located 77 miles (124km) apart and the proposal is to combine their operations in Hereford. Most of the office-based employees from Sutton Coldfield will be relocated to a leased office in the area.

“We are committed to having transparent and fair discussions with the employees affected by these proposals,” says Schaeffler UK managing director, Greig Littlefair. “We will also ensure our customers continue to be served and that these proposed changes create minimal disruption for them.”